What’s Your Life Worth?
What’s Your Life Worth?
A strange question, I know—but hear me out.
Every dollar you work to earn is directly linked to the time you spent earning it. While we technically work for money, what we're really doing is trading our time for things. In a sense, we're purchasing items in small increments of our lives. These increments add up to the sum of your life. Or, as Vicki Robin calls it in Your Money or Your Life, it's your "life energy." Spoilers ahead.
An Example
I used to have a coworker, let’s call her Mary. Mary was in her late teens or early twenties when we worked together. She often complained about being broke and down to her last $20 before payday.
This conversation would often occur on a weekly basis. However to me it was easy to understand why this situation would occur week after week. Most days she purchased a $9 Starbucks drink.
Quick side note: HOLY SHIT—I didn’t believe her at first. I actually went to the Starbucks website and customized her drink to confirm it cost that much. Turns out, she wasn’t joking.
Anyway, back to her spending. That $9 drink was a daily habit. On top of that, she bought snacks and drinks from the vending machine, let’s call that another $3–$4. After work, she often picked up fast food, sometimes for her boyfriend too. But even assuming she only bought for herself, let’s say that’s $12 per meal.
Altogether, she was spending roughly $25 per day on Starbucks, vending machine snacks, and fast food.
At the time, Mary earned $16 per hour. After taxes, that meant she was working nearly two hours, or about 25% of her workday just to afford these consumables.
I felt bad watching her repeat this pattern week after week. One day, I asked her (as kindly as I could) if she cared about how much she was spending on this stuff. Her response? In essence: YOLO.
I never brought it up again but I kept hearing the same complaints week after week.
Yet, Who Am I to Judge?
I wish I could say this was an isolated incident, but I’ve heard this story play out in many forms. Fast food, Kwik Trip, vaping, I’ve heard all the addictions.
There was a time when I was spending over 25% of my income on cars. Some might say that's a ridiculous addiction, but to me it felt normal. It brought me joy.
Maybe, for Mary, Starbucks and fast food gave her the same kind of joy.
What Is Your Life Worth?
Last blog, I introduced the value equation. My personal method for deciding what’s worth spending money on. But the equation missed something important: time.
So, what is your time and fundamentally, your life—really worth?
Your Money or Your Life
Last month I finished reading Your Money or Your Life by Vicki Robin and Joseph R. Dominguez. One of the book’s key takeaways is that we all have a limited amount of “life energy” in other words, time.
When you go to work, you’re trading this energy for dollars. And when you spend those dollars, you’re indirectly spending your life energy on whatever you buy.
Going back to Mary, she was spending 25% of her working time to buy Starbucks, snacks, and fast food. Was that a good use of her life energy? That’s for you (and her) to decide.
Years ago, long before I read the book, I created a chart I called “Time Is Money.” I calculated my hourly wage after taxes and figured out how long I’d need to work to buy various items. I charted it out for $10, $50, $100, $250, $500, $1000, and so on.
Looking at that chart helped me realize how much of my life I was trading for certain things. I would ask myself: Would I actually work X number of hours if the reward were this item instead of a paycheck?
Most of the time, my answer was “no.” It really put things into perspective.
Value
It’s all about value.
Does fast food add real value to your life? Do you feel better after eating it? How much of your life are you willing to trade for it? 5%? 10%? 25%, like Mary?
Only you can answer that.
These are the types of questions I ask myself now when I spend. Do I value this thing? And how much of my life am I giving up to enjoy it?
The worst-case scenario is spending a lot of your life on something you don’t even like. On the flip side, some of the best things I’ve bought in the last five years were under $100 but brought far more happiness than items 10x or 20x the cost.
Updated Value Equation
Here’s my updated version of the Value Equation, with time now factored into the cost:
1. Value
Do I value this thing? Does it improve my life?
2. Cost
What’s the cost? In money and in life energy?
3. Compounded
What does this look like over long periods of time?
4. Commitment
Knowing the above, can I commit to a change or decision?
This equation has brought clarity to my spending. I’ve let go of many “normal” things that didn’t actually serve me. Time is one of our most valuable resources, yet we think about it the least when making purchases.
Get a Calendar
Here’s an idea I recently had: print a calendar of the current month.
Once you have it, calculate your daily wage. The simplest way is to take what actually hits your bank account, add back any non-tax deductions, and divide that by the number of days in your pay period.
Now, grab a few colored pens and shade in your spending—only for the days you work. I work Monday to Friday, so I only fill in those days.
Let’s say you make $200/day after taxes and spend $400 a month on fast food. That’s two days of work, shade two days for that.
Have an $800 car payment? That’s four days.
Spending $300 on entertainment? Shade 1.5 days.
Taxes might take up 25% of your calendar or more.
Once you fill it all in, you might be shocked to realize that most of your month is spent working for things you don’t actually care about.
I wish Mary could have seen that an entire work week of her month was going to Starbucks and junk food.
Final Thoughts
I try to keep this idea in the back of my mind whenever I spend money: What is my life worth to me?
Is this thing really worth what I’m about to trade for it? Not just in dollars, but in time?
Or would I rather save that life energy for something more meaningful?
It’s a powerful question, and one worth pondering.